Balch v. Commissioner

PER CURIAM. This case came on to be heard upon the record and briefs and oral arguments of counsel; and it appearing that the only question presented is the legality of a deduction of $7,333.40 which the petitioner claimed in her income tax return for the year 1935; And it appearing that petitioner created an irrevocable trust of which she was to receive the income for life with the remainder to her son, or in the event of his death to his children or their issue; and that in the taxable year an assessment was levied against 1,892 shares of Kalamazoo Bancshares, Inc., held by such trust; that the trustee had no cash balance in the trust at that time, and that rather than have the trustee sell any of the securities held in trust the petitioner advanced to the trustee $7,333.40, the amount necessary to pay such assessment; and included such amount with other gifts in her federal gift tax return for the year 1935; And it appearing that a deduction is allowable only where there is clear provision therefor; New Colonial Ice Co., Inc., v. Helvering. 292 U.S. 435, 440, 54 S.Ct. 788, 78 L.Ed. 1348; and that the petitioner, in advancing the sum in question made a voluntary contribution to the trust estate and sustained no loss within the meaning of the federal income tax law; It is ordered that the decision of the Board of Tax Appeals be, and it hereby is, affirmed.